Date: 19990305
Docket: T-294-96
BETWEEN:
APOTEX INC.
Plaintiff
- and -
MERCK & CO., INC. and
MERCK FROSST CANADA INC.
Defendants
REASONS FOR ORDER
REED, J.:
[1] The defendants ("Merck") seek leave to amend their statement of defence and to add a counterclaim thereto. Much of the proposed amendment has been agreed to by the plaintiff ("Apotex"). These reasons concern the disputed elements.
[2] Apotex objects to the reference, found in paragraph 5 of the proposed amended statement of defence and counterclaim, to "the permanent injunction" contained in Mr. Justice MacKay's decision of December 14, 1994 (T-2408-91). Reference to that judgment as a whole is accepted, however, as being proper pleading. There is an inconsistency in this approach. In any event, it will be clear from what is said later in these reasons, that I am of the view that this pleading is a proper one.
[3] Apotex objects to the paragraphs in the proposed amendment that relate to the acquisition by Apotex of 50.85 kgs of bulk enalapril maleate (lot P-63588), on or about December 6, 1990. This is referred to in paragraphs 10, 11, 12, part of 17, and sub-paragraph 20(a) of the proposed amendment. Apotex's objection is well founded. Evidence concerning lot P-63588 was part of the earlier litigation in T-2408-91 and was subject to applications and orders made by both the Trial Division and the Appeal Division. Claims relating thereto appear to have been abandoned by Merck in that context. They cannot now be re-litigated.
[4] Apotex objects to the claims that seek punitive and exemplary damages based on the alleged breach of Mr. Justice MacKay's order in T-2408-91, arising from the acquisition of 772.9 kgs of enalapril maleate on or about May 26 and October 10, 1994 (after the compulsory licence was extinguished). As I understand the argument, it is that such a claim must be made in the T-2408-91 action (e.g., by way of a contempt proceeding), but cannot be part of the counterclaim in this action because there is no independent cause of action to support that claim. Apotex agrees, however, that claims relating to the 772.9 kgs are properly included in the counterclaim to the extent that a declaration, damages and orders for delivery up, with respect thereto are claimed.
[5] I am not persuaded that the claim for punitive or exemplary damages insofar as they are based on the acquisition of the 772.9 kgs, as being an alleged breach of Mr. Justice MacKay's permanent injunction order, is improper pleading in this action. Merck's defence, as I understand it, involves, in part, the allegation that Apotex's claims in this action are res judicata, as a result of Mr. Justice MacKay's earlier decision, that the 772.9 kgs fall within the terms of that judgment and the permanent injunction contained therein. In that context, then, it is agreed that claims by way of counterclaim are properly asserted for damages and a declaration. At the same time, claims for exemplary or punitive damages related to the acquisition of this same enalapril maleate are said not to be proper pleading because the nature of the conduct to support those claims is assessed by reference to an extant court order. I am not persuaded that this is correct. Merck could pursue in the context of the T-2408-91 action a contempt proceeding on the basis of its allegation that the 772.9 kgs acquisition falls within the order given in that case. That does not, however, preclude Merck from arguing in this case that the acquisition came within the order and is an infringement of its patent, and that these circumstances should give rise to punitive or exemplary damages.
[6] I agree with counsel for Apotex that the pleading in subparagraph 20(c) seeking a declaration confirming Mr. Justice MacKay's order is an improper pleading.
[7] Success having been divided, the costs of this motion should follow those awarded on the hearing of the merits of the claim.
Judge
OTTAWA, ONTARIO
March 5, 1999